Markets Cheer Chinese Vaccine Drive Announcement Clearing Path Toward Reopening
Hong Kong markets and Chinese stocks listed in the US surged in premarket trading as Chinese government health experts made an unscheduled overnight announcement in which they not only vowed to speed up Covid shots for the elderly but to avoid excessive restrictions, fueling a new round of bets that Beijing is bending to the pressure of an economic reopening
Vaccinations: There was a focus on the vaccination of the elderly. This may seem obvious but it’s one of the major obstacles to China’s reopening. While there was nothing about a vaccine mandate, we heard strong words urging older residents to take responsibility for their own health.
Virulence: One spokesperson detailed the science showing omicron and its sub-variants aren’t as dangerous. Lowering the population’s fear of the virus is an important step toward a panic-free reopening. There was also a bit of self-congratulatory talk around China’s low death rate — claiming victory over the pandemic also plays into how Beijing will clear the path to move on.
Inconvenience: Health officials said it was paramount to minimize the impact caused by the Covid outbreak. This is somewhat of a reiteration but to investors it suggests the government is concerned about the anxiety caused by its pandemic response.
Excessive measures: The spokespeople said some local governments are taking lockdowns too far, imposing measures without prior approval from the central government. Restrictions should be limited in scale and length, and local authorities must respond quickly to “reasonable” requests from residents. If not they will be named and shamed.
“We do not expect China policy to publicly shift away from the Zero Covid stance, however, we could see some easing of the policy privately and in localized areas,” Jefferies analyst Mohit Kumar told clients in a note.
https://www.zerohedge.com/markets/chinese-stocks-jump-elderly-vaccination-boost-fuels-reopening-bets